FROM: The Hon. Gov. Rick Perry
TO: Any Texan or Wannabe Texan
Do you have an idea for a new business? Do you wish to expand your current business? Bring a business to Texas? Or would you just like lots and lots of money? Then you, fellow Texan or potential Texan, have come to the right place: the Texas Enterprise Fund or TEF. It will dole out hundreds of millions of taxpayers’ dollars to anyone who needs a fresh investment to keep the Texas economy rolling. Let me give you a few simple examples. Your business is going broke because you thought disco would rebound or that Jeff Skilling would make you a killing. Maybe your investment in that emu farm didn’t play out. Anybody can make a mistake, as I was telling my debate coach.
Or rather than expand, you want to start your own business because you are tired of working for 40 years as a taxidermist’s apprentice. You want to go to medical school and become a neurosurgeon. Sixty isn’t too old to begin again. You need a $1.2-million student loan to get that degree and hire a secretary. More jobs for Texans! Both UT-Austin and Texas A&M may need new head football coaches. Can you do coachspeak? “We’re cautiously optimistic.” “We take them one game at a time.” Open a tomato farm and advertise: “Hand-Picked Tomatoes!” Then hire 300 workers (ages 10 to 14) to spend August afternoons picking your tomatoes for 50 cents an hour. The pickers can be found at any Border Patrol warehouse. Actually, most of them are long gone, even though they promised to show up for their court appearance.
If you don’t care how the TEF operates, good. But if you’re like the nosey press and want to learn more, back in 2003 the Legislature created a half-billion dollar fund to help expand businesses and attract new jobs and investment to the state. (Incidentally, if this helps further anyone’s political career, so be it.) The fund was re-appropriated in 2005, 2007, 2009, and 2011. The money was to be handed out by the governor, the lite gov and the speaker of the house. But the TEF seems to have a subsidiary for select companies, called State Licensed Under-Served Humans or SLUSH. An independent investigation by the State Auditor found that half the total — $222 million — had been awarded to companies and schools that never submitted a formal application or agreed to create a specific numbers of jobs.
Loren Steffy, a former business columnist for the Houston Chronicle, noted that two of the biggest disbursals went to public universities – UT and A&M — which in turn funneled the funds to companies that already operated in Texas — Lexicon Pharmaceuticals and Texas Instruments. Citgo received $5 million and cut 103 jobs. Fortunately, Citgo hadn’t applied for the money. The list goes on and on. The semiconductor company Sematech, received $40 million then, after spending the incentive money, moved to New York. Toyota got $40 million to help install a major plant in Texas. Later, the company said it was coming here anyway – but kept the money. Lexicon Genetic was given $35 million to create 125 jobs, that’s $21,658 per job. New jobs so far? Zero.
The independent auditor’s 107-page report also discovered since 2003 some 23 projects awarded nearly $37 million from the fund were terminated or remain inactive, including a $4 million award to Lockheed Martin Corp., which was required to create 550 new jobs. Only 245 were created, then TEF apparently gave up trying to get its money back. Many of the files under jobs created list “N/A” – not available. So we may never know how many jobs were created, if any. Texas recovered $19.2 million from those failed projects. The auditors, however, concluded the state should have been repaid another $3.8 million. Looking at the big picture, while grant recipients were required to create more than 66,000 jobs in 2013, the auditor’s report found grant recipients created 18,000 fewer jobs than they were supposed to.
Also, the auditors said millions had been handed out without oversight, little regard to the rules – reports, transparency, etc. – and little effort has been made to get money back from those recipients which had failed in their plans and promises. Another interesting point. Attorney General Greg Abbott ruled that many of the TEF records could be kept secret. (He denies this.) Would it surprise you to know that Abbott, the governor-in-waiting, has received at least $1.4 million in campaign contributions from investors and officers of businesses that got millions from the TEF? He’ll still win. This whole operation has raised so many, many question that six U.S. Congress members, all Democrats of course, have asked for a criminal investigation into this boondoggle.
The audit doesn’t even get into the scandal-plagued Cancer Prevention and Research Institute of Texas which we taxpayers have funded with $3 billion – yes, BILLION. At that same time, M.D. Anderson hired two Harvard officials who promptly spent between $550,000 and $2 million on their Houston offices, and included items such as a $7,755 Knoll sofa and a $5,000 lounge chair. The Ivies referred to their new Texas colleagues as “these losers.”
OK, there have been a few hiccups, but the TEF is also a start-up, which gets back to your chance to cash in. Bring slightly used anti-Ebola haz-mat suits to Dallas. Pecos needs a ballet school and auditorium. Some of you out-of-staters might want to come here and set up a political consulting firm to handle — oh, I don’t know — maybe a presidential campaign since Karl Rove sure struck out last time. So get your plans together and apply to TEF. Actually, you don’t even need to apply. I’ve gone through $505 million and most of the jobs were created by adding state employees to hand out that money. If it’s good enough for Toyota it’s good enough for you.
Ashby wants his share at ashby2@comcast.